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<Research Report>M Stanley: BYD, GWM, GEELY To Benefit More if News on CN NEV Subsidy Policy Is True
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2022/05/19 09:40
While Beijing is purportedly exploring to subsidize vehicle purchases to boost NEV and traditional car sales, Morgan Stanley assumed that the subsidy program, if proved accurate, will focus on vehicles priced below RMB150,000. Local brands, such as BYD COMPANY (01211.HK), GREATWALL MOTOR (02333.HK) and GEELY AUTO (00175.HK), are dominantly holding such kind of vehicles.

In Morgan Stanley's view, NIO-SW (09866.HK), XPENG-W (09868.HK) and LI AUTO-W (02015.HK), on the other hand, will be unaffected by the subsidy program since all of their models are above RMB150,000, but tier-2 startups could be beneficiaries.

Related NewsHSBC Global Research Lifts LI AUTO-W (02015.HK) TP to $184, Rating Buy
Past experience told that stimulus measures often take 1-2 months at least to play out, Morgan Stanley said, thus expecting the subsidy could facilitate vehicle sales from mid-3Q22. The market was expected to respond positively to the news, which may indicate the worst should have been over for auto industry, the broker added.
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